Talk about missing the elephant in the living room. Canada is one of the few places in the world that doesn't restrict foreign ownership of residential property. So where do you put your money if you're one of the millions of newly rich Chinese that don't trust their government or currency? Answer: You buy a house in Vancouver or Toronto.

Most of these buyers are paying cash. There's no financing involved, at least not at this end. This is not an investment these people are making, it's a form of insurance. Get the wife and kids out to a better environment, and if things go south, you've got somewhere to land. I don't blame them - I'd do the same thing in their shoes - but to ignore this factor is to overlook a major driver of Canadian home prices, at least in the urban centers.

Th irony here is that if times are good in China, money will come to Canada, and if times are bad, even more will come. The idea that we'll suffer a collapse along the lines of the USA is just nonsense. Their boom was caused by massive fraud on top of low interest rates. We still have prudent banking here, and while it's true that low rates will drive prices to a degree, I still think outside money is still the major factor, especially here in Vancouver.

Frankly, if you want to compare Vancouver to other markets, you should use Monaco, Geneva and Montivideo as your comps. Those places will do well regardless of outside conditions because money will always need a place to hide.

ebear